Key facts
- Constellation Brands beat Wall Street profit estimates for the first quarter.
- Demand for beer brands like Corona and Modelo Especial drove the results.
- The beer segment's net sales increased by 2% year-over-year.
- The company affirmed its fiscal 2027 adjusted profit per share outlook.
Constellation Brands exceeded Wall Street's profit expectations for the first quarter, reporting $3.43 per share against estimates of $3.20. This performance was bolstered by robust demand for its popular beer brands, including Corona and Modelo Especial, despite broader macroeconomic pressures like inflation and high living costs. The company's beer segment saw a 2% year-over-year increase in net sales, reaching $2.28 billion, while its wine and spirits business reported an 8% organic net sales rise.
Beer sales rose about 2% during the three months ended May 31, the second straight quarter of gains after three quarters of declines. CEO Nicholas Fink noted that major sporting events like the NBA Finals and the soccer World Cup are spurring social gatherings and lifting consumption. Despite a 3.3% overall decline in net sales to $2.43 billion for the quarter ended May 31, the company affirmed its fiscal 2027 adjusted profit per share outlook of $11.20 to $11.90.
Analysts suggest that the convergence of the World Cup, the Fourth of July holiday, and America's 250th anniversary is creating an extended period of social gatherings, encouraging spending on festivities. International visitors are also expected to provide an additional boost in World Cup host cities. The passion for soccer in Hispanic culture is helping brands like Corona and Modelo tap into a major customer base.
Shares of Constellation Brands saw a rise of approximately 3.5% in extended trading following the earnings report.